Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley.
Speaker 1: We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot com, and of course, on the Bloomberg. Francisco
Speaker 1: Blanche be Of, a head of Global Commodities and Derivatives research,
Speaker 1: joins us. What's your take on this? You've been writing
Speaker 1: about bitcoin here and there for years now, Francisco, has
Speaker 1: it now been accepted widely accepted in the institutional investment community? Um? Well, look,
Speaker 1: I think I think uh cryptocurrencies in general and bitcomming
Speaker 1: in particular, are to your earlier question, I think they're
Speaker 1: clearly they're clearly tokens, and uh tokens are token circummodities,
Speaker 1: so I wouldn't necessarily qualify them as currencies. Currencies are
Speaker 1: issued by a government. Um, Bitcoin or any any cryptocurrency
Speaker 1: can be issued by almost anyone, right, So in that sense,
Speaker 1: it's uh, it's a bit of an unusual setup, and uh,
Speaker 1: so I would qualify that. I think I think it's
Speaker 1: more of a commodity and it is a currency, UM,
Speaker 1: a crypto token The second thing I'd say is that
Speaker 1: you know, if you if you think about this, this
Speaker 1: particular construct that that bitcoin has, remember that ninety plus
Speaker 1: of the coin is is held by less than one
Speaker 1: percent of the account holders. So there's a very high
Speaker 1: concentration of the early um, of the early adopters that
Speaker 1: haven't really sold. And and again, if we think about
Speaker 1: supply and demand, you know, it's it's just one of
Speaker 1: those things that there's been a flurry of demand and
Speaker 1: and frankly not very much supply because the first of all,
Speaker 1: the supplies cat longer term and uh and and and
Speaker 1: that's been the issue. So so it's extremely volatile. I mean,
Speaker 1: I wouldn't I mean, compared it to any other commodity,
Speaker 1: the volativity of of of crypt currency is way way
Speaker 1: higher in most cases. So, Francisco, I want to ask you,
Speaker 1: what do you make though of a year where you've
Speaker 1: got Bitcoin up more than three here in and you've
Speaker 1: got gold on track to have the biggest annual advance
Speaker 1: in a decade. How do you kind of juxtaposing to
Speaker 1: you and how do you kind of make sense of that? Right? So,
Speaker 1: to me, it's it's quite straightforward. We've had of course,
Speaker 1: a flurry of liquidity that's coming to the market from
Speaker 1: the central banks, the FED spounce. It's more than doubled
Speaker 1: as well throughout the period. So naturally, when you inject
Speaker 1: so much money. Remember we were talking about currency before, right,
Speaker 1: so currency is created by governments. And when when, uh,
Speaker 1: the world's most important center bank, in the world's artist
Speaker 1: economy injects so much liquid in the financial system, all
Speaker 1: assets tend to benefit from it. Um and and that's
Speaker 1: what we've seen now if you think about airline stocks,
Speaker 1: or you think about other assets that have been severely
Speaker 1: impacted by mobility, which is really what the COVID nineteen
Speaker 1: crisis is about. Uh, they have not gone back to
Speaker 1: previous historical records, but all the asset classes that were
Speaker 1: in some way constraint the shirts and of course that's
Speaker 1: included UM commodities like gold or silver UM. And and
Speaker 1: uh it's also like I said before, it's it's impact
Speaker 1: to think about UM electric electric vehicle stocks, right. I
Speaker 1: mean those have have also taken off in a huge way.
Speaker 1: So so I think liquidity has been driving this this
Speaker 1: enormous divergence and in asset values that we've seen. Uh,
Speaker 1: because central banks with the fit of the helm. We're
Speaker 1: trying to support the economy and predicularly the financial markets.
Speaker 1: So what happened then, UM to oil? I mean, we
Speaker 1: were looking at sixty dollars Francisco at the beginning of
Speaker 1: the year, it dropped to negative forty, and now we're
Speaker 1: trading at nine. I can take the negative drop as
Speaker 1: a as a blip, UM, a giant, possibly orchestrated fat finger,
Speaker 1: But nonetheless it's a commodity priced in dollars that has
Speaker 1: dropped in value. Why well so So the oil story,
Speaker 1: as I mentioned earlier right, is very linked to the
Speaker 1: idea that COVID nineteen is a unique counter recession. Normally,
Speaker 1: recessions are cyclical in the sense that we see industry
Speaker 1: slowing down many fully and we tend to see some
Speaker 1: kind of financially band driving them. This time around, COVID
Speaker 1: nineteen just literally shut us, UM shut shut the global
Speaker 1: economy down in a meaningful way, and UM and mobility
Speaker 1: collapsed suddenly. We couldn't go anywhere. In fact, today I'm
Speaker 1: a home rather than being at the studio with you guys,
Speaker 1: as I would normally do on a on a regular day. Um.
Speaker 1: You know, I haven't. I haven't been on a plane now,
Speaker 1: I guess for the longest period of my life, I
Speaker 1: mean spring night, ten ten months now without kind of
Speaker 1: hopping on a plane. Um, so you know that that
Speaker 1: mobility is was taken down. The demand for oil by
Speaker 1: as much as thirty percent in the month of April
Speaker 1: UM and when the man felt by thirty which also
Speaker 1: probably linked you know, I think of GDP also felt
Speaker 1: about that number. Oil prices collapsed and uh, and then
Speaker 1: to your point, there was a bit of a fat
Speaker 1: finger there. But but also also at some point OPEC
Speaker 1: started to catch back production. We reopened the global economy
Speaker 1: and starting in May and June and and things picked up.
Speaker 1: But but now in the last couple of days we've
Speaker 1: gotten a little nervous again because of this new virus
Speaker 1: strain going on in the UK. Right, So anyway, okay,
Speaker 1: Francisco just got about seconds. So what's your projection? Give
Speaker 1: us a quick price target for oil. So we we
Speaker 1: see we see oil getting to sixty barrel by the
Speaker 1: second quarter, So we are we are constructed. We think
Speaker 1: the economy comes back. Obviously, we have to control this
Speaker 1: UK strain in the first In the next couple of months,
Speaker 1: so it could be a little patchy in January, but
Speaker 1: I think once we get to June, we're gonna be
Speaker 1: in a much better shape. Those vaccines are going to
Speaker 1: really help get things moving. No punting, all right, Gonna
Speaker 1: leave it on that note. Francisco, thank you so much.
Speaker 1: Have a great and safe new year. Francisco blant He
Speaker 1: is bake of America ahead of global commodities and derivatives research.
Speaker 1: Joining us here, Lara Ray, Let's bring her in right now,
Speaker 1: FS Investments Chief US Economists And let me start Lara
Speaker 1: with the Devil's advocate with the other side of this um.
Speaker 1: At what point does the US spend too much money?
Speaker 1: At what point do uh does the US take on
Speaker 1: too much debt? Because there isn't really a magic money tree, right,
Speaker 1: I mean, at some point you just can't keep handing
Speaker 1: out checks to American citizens. Well, I think if we've
Speaker 1: seen anything. Instead, if we wait too long and we
Speaker 1: wait until the economy is really you know, experiencings, it's
Speaker 1: a really cataclysmic disruption that we then when we're when
Speaker 1: we're performing legislation under triage, we can at that point
Speaker 1: do too much or be I think less targeted. The
Speaker 1: real point is that if you can enact legislation earlier,
Speaker 1: you can afford to be more thoughtful and you can
Speaker 1: be more targeted with it, and that just diminishes the
Speaker 1: way to diminishes the need for these multi trillion dollar
Speaker 1: huge packages. I think the point that Carol made is
Speaker 1: really important, which is that you know, right now we're
Speaker 1: still we're seeing these delays that really risk I think
Speaker 1: making the need so much more inflamed. At that point,
Speaker 1: you're trying to just fill a bigger gap, it gets
Speaker 1: more expensive, So doing less earlier really gets you further. Well,
Speaker 1: and the thing is, Lara, this is all about you know,
Speaker 1: this is gonna show in the economy in terms of
Speaker 1: the economic growth figures, which are always lagging, or a
Speaker 1: lot of them are. But I mean there's another story
Speaker 1: on the Bloomberg. Millions of Americans are calling in six
Speaker 1: stunting the recovery. The whole idea is, you know, there
Speaker 1: are a lot of lost days and that plays into productivity,
Speaker 1: and that plays into economic growth. That it's even stunting that,
Speaker 1: so layer that on top you've gotta be a little
Speaker 1: bit worried about growth going forward. I think that's right, Carol,
Speaker 1: If you know, we and and here this is kind
Speaker 1: of getting deep in the weeds on the employment numbers.
Speaker 1: But you know, you look at initial claims and to
Speaker 1: your point, they've they've come down, but void relative to
Speaker 1: any other recession. They are so elevated even now months
Speaker 1: into this recession. And you add to the fact that
Speaker 1: so many people have left the labor force. We're going
Speaker 1: to get the big monthly payroll numbers next Friday, But
Speaker 1: one of the things that we don't usually pay attention
Speaker 1: to is that participation rate. All that is expressing is
Speaker 1: how many people are actually out there looking for jobs.
Speaker 1: We've seen the unemployment rate calm down to less than
Speaker 1: seven percent, but bury beneath that is the fact that
Speaker 1: an awful lot of people and probably because schools aren't open.
Speaker 1: You can think of a lot of reasons why, or
Speaker 1: people have taken their elders out of nursing homes. You
Speaker 1: can think of a lot of reasons why during this pandemic,
Speaker 1: people have decided to stop looking for work so that
Speaker 1: lower participation rate. Little things like that. You know, you
Speaker 1: cut a ten million here, ten million people there from
Speaker 1: the labor force, and when you think about what gives
Speaker 1: us growth, what gives us GDP. You know, those numbers
Speaker 1: just may not be quite as strong as a lot
Speaker 1: of people are expecting, you know, into the end of
Speaker 1: one or as we get that traction back online after
Speaker 1: the vaccine. So, Lara, do you think companies are going
Speaker 1: to hold off in terms of hiring even if they
Speaker 1: expect demand to start coming back. I just wonder how
Speaker 1: hesitant do you think companies are going to be until
Speaker 1: they really see significant demand in This is gonna be
Speaker 1: a critical thing that we're watching in those monthly payroll numbers,
Speaker 1: because what we've seen is a really big decline in
Speaker 1: temporary unemployment, but we've started to see permanent employment rising.
Speaker 1: So I think something fascinating about COVID is that it's
Speaker 1: really accelerated. So many trends that we saw prior to
Speaker 1: the pandemic, they just really accelerated rapidly, and one of
Speaker 1: them has been this difference between temporary and permanent employment.
Speaker 1: And so in a normal recession. This is not a
Speaker 1: normal recession, but in a normal recession, permanent unemployment really
Speaker 1: continues to rise throughout the recession, and it keeps rising
Speaker 1: afterwards because companies may bring back permanent or temporary. Excuse me.
Speaker 1: They may be more likely to kind of hire people
Speaker 1: temporarily temp workers filling the gaps, but they're less likely
Speaker 1: to bring on that permanent employment. So in that regard,
Speaker 1: what we're seeing now is actually playing out more in
Speaker 1: a more normal cycle, and that's troubling. You know, we
Speaker 1: really need to see companies bringing back those permanent jobs
Speaker 1: that offer households job security. That's at the end of
Speaker 1: the day. Over long cycles without stimulus checks, that's what
Speaker 1: really burnishes the household confidence of consumer competence that drives
Speaker 1: our economy. Uh. You know, the thing most troubling to
Speaker 1: me has been people close to retirement or or planning
Speaker 1: to retire now they're not getting any kind of return.
Speaker 1: And you mentioned in your note one of my favorite
Speaker 1: books from childhood, The Giving Tree. It's so depressing when
Speaker 1: it's completely cut down. Um. And you compare this to
Speaker 1: the fixed income market, for what do you see happening
Speaker 1: with the tenure for example next year? You know, so
Speaker 1: many people are looking ahead with really optimistic growth outlooks
Speaker 1: for one, and I think you know a lot of
Speaker 1: the forecasts around four percent are very very reasonable, particularly
Speaker 1: in the second half of the year if we really
Speaker 1: get the distribution of the vaccine effective. But here's the
Speaker 1: real problem, right, long term interest rates are still I think,
Speaker 1: going to be trapped at really very near these historic
Speaker 1: lows because on the other side of it, you're going
Speaker 1: to have continued quantitative easing from the Fed. You're going
Speaker 1: to have continued, I think, uncertainty about the direction of inflation.
Speaker 1: A lot of people calling for this big reflation play
Speaker 1: next year, I think are really getting out over their skis.
Speaker 1: The reality is, although you had you had, you had
Speaker 1: that to some extent now and this is really larah
Speaker 1: what the FED is trying to you and and the
Speaker 1: e c B and everyone else. This is financial repression,
Speaker 1: right because they're pushing even retirees out the risk spectrum.
Speaker 1: So to get back to my mom, you know she
Speaker 1: can't be holding fixed income right now at sixty eight.
Speaker 1: I can't remember exactly how old she has, but you
Speaker 1: know she's got to be in equities. And this is
Speaker 1: you write about the liquid courage. The Feed is enticing
Speaker 1: these people to go out there and at least in
Speaker 1: it's been thankfully a good a good move. Oh absolutely,
Speaker 1: And I think you know the point of of the
Speaker 1: the idea of the giving tree, right, this tree that
Speaker 1: was fixed income that gave us growth and income and diversification.
Speaker 1: You know throughout the decades, back when interest rates were
Speaker 1: seven percent and five percent and even four percent in
Speaker 1: the two thousand's, you know it's two thousand times we
Speaker 1: really saw that fall flat. At the height of growth
Speaker 1: that we had in two thousand seventeen eighteen, rates were
Speaker 1: two and a half percent. Know, now you're less than
Speaker 1: one percent on the tenure the Barclays bag is you know,
Speaker 1: one point to five. At the end of the day,
Speaker 1: you need more. So I think, you know, this is
Speaker 1: an asset class with trillions of dollars still in it
Speaker 1: or related to it. So investors, I think this scheme
Speaker 1: of trying to get more active around income is just
Speaker 1: going to continue trying to push further out the incomes
Speaker 1: by right, lower duration, all those things we're gonna keep
Speaker 1: going in Lara Ram, we will be talking with you,
Speaker 1: no doubt. Have a happy New year, Stay safe, Lower Ram.
Speaker 1: She has FS Investments chief US Economists. Let's see what
Speaker 1: Dr Deborah Fuller, University of Washington School of Medicine, Microbiology professor,
Speaker 1: this is her world. See what she has to say,
Speaker 1: Dr Fuller, nice to have you here with Matt and myself.
Speaker 1: When you look at the headlines that are out there
Speaker 1: on a daily basis, it's kind of hard to keep up.
Speaker 1: It's hard not to be overwhelmed by what's going on
Speaker 1: when it comes to COVID. Uh, what is top of
Speaker 1: mind for you on this Thursday morning, on this New
Speaker 1: Year's Eve. Well, the top of my mind is as
Speaker 1: quickly as the news is changing, so does the virus.
Speaker 1: As we know, this new viral variant that came out
Speaker 1: at increases transmission in the population. That's at the top
Speaker 1: of my mind, because that really does impact things like
Speaker 1: how quickly we can get to her immunity, and of
Speaker 1: course raises a concern about increasing the number of the
Speaker 1: cases in the worldwide and the burden and our hospitals.
Speaker 1: How quickly can we get to her immunity, Doctor Fuller,
Speaker 1: can you give us maybe best case um scenario, worst
Speaker 1: case scenario? Well, as I mentioned, that keeps changing her
Speaker 1: community depends on two different variables. That is the level
Speaker 1: of vaccine efficacy, which is quite high for some of
Speaker 1: these vaccines, and that's a good thing, but it also changes.
Speaker 1: It depends on the transmission rate of the virus which
Speaker 1: ship because of these mutations can undergo changes. So we've
Speaker 1: heard anything ranging from sixty to of the population will
Speaker 1: need to get vaccinated, and how quickly that happens will
Speaker 1: depend on how quickly we can roll out these vaccines
Speaker 1: and get them distributed in in addition to getting new
Speaker 1: ones license like we're seeing this this uh aster Zenica
Speaker 1: just recently just got their vaccine license in the UK.
Speaker 1: One of the other things that really worries me as
Speaker 1: someone who has had line dosease like four times, what
Speaker 1: are the long term effects or what do we know
Speaker 1: now about the long term effects of this disease. Well,
Speaker 1: there's uh, there's uh two different, two different things there
Speaker 1: in terms of long terms effects of the disease as
Speaker 1: something we're going to have to be studying for quite
Speaker 1: some time. But in terms of long term effects of
Speaker 1: the vaccine, that's a lot of new data is starting
Speaker 1: to roll out that we're seeing um as we study
Speaker 1: the vaccine further, that immunity seems to be last seeing
Speaker 1: potentially up to six months after immunization. That's as far
Speaker 1: as we've gotten so far. Hopefully it will last at
Speaker 1: least a year or more, so that when you get vaccinated,
Speaker 1: you can at least anticipate being immune to this virus
Speaker 1: for for ideally a year or more. Right because we
Speaker 1: need that because it's going to take, as we know
Speaker 1: Dr Fuller, a long time for everyone to get vaccine,
Speaker 1: and right now we heard from president like Joe Biden,
Speaker 1: he's worried that it could take years at the current
Speaker 1: pace that we are, So we need that. Having said that,
Speaker 1: I want to go back to the variant because that's
Speaker 1: the one thing that just kind of unnerves me every morning.
Speaker 1: Could we get to a variant that doesn't respond to
Speaker 1: the current rounds of vaccines. Well, if a virus can,
Speaker 1: it will That's something I learned a long time ago
Speaker 1: when I was studying virology. Uh, it is quite possible
Speaker 1: it could attain mutations to be resistant to our vaccines,
Speaker 1: but we don't anticipate that would be easy for the
Speaker 1: virus to do because the vaccines were designed with this
Speaker 1: in mind, with the fact that viruses do undergo mutations,
Speaker 1: and so it will be very difficult for this virus
Speaker 1: to get the number and the right types of mutations
Speaker 1: to be able to invade vaccine immunity with that set
Speaker 1: is possible. And one of the good things about the
Speaker 1: types of vaccines were developing here, the RNA vaccines and
Speaker 1: now these add no virus based vaccines are very quick
Speaker 1: to update if if needed, if a new variant comes
Speaker 1: out that is resistant to our vaccine induced community. So
Speaker 1: I have to say, there's a story. Um. We were
Speaker 1: talking about it in the break before we got going
Speaker 1: you um, me and Matt, and it's saying it's by
Speaker 1: our Bloomberg News team China, making it harder to solve
Speaker 1: the mystery of where COVID began. How important is it
Speaker 1: that we understand where this COVID nineteen virus specifically came from,
Speaker 1: to make sure that we truly understand it and can
Speaker 1: kind of plan for others to come because others will
Speaker 1: come right at absolutely UH. This is something about viruses.
Speaker 1: They they do transmit. One of the most common ways
Speaker 1: that pandemics will start is a transmission from UH an
Speaker 1: animal reservoir, from particular animal into humans. And understanding how
Speaker 1: that happened that something that scientists will continue to studying.
Speaker 1: We're still picking at that, improbing at it because it's
Speaker 1: so important UH to learn about that to be able
Speaker 1: to hopefully predict the next one and stop it before
Speaker 1: it gets to this point. Dr Fuller, one of the
Speaker 1: conversations I'm having with everyone in my world is, Listen,
Speaker 1: I'm just exhausted by this year. I know I have
Speaker 1: to be good because we're we can kind of see
Speaker 1: the finish line. Having said that, it's still going to
Speaker 1: be probably a couple of rough months in terms of
Speaker 1: our economy still being shut down. What do we need
Speaker 1: to remember as we move forward, more people get the vaccine,
Speaker 1: those basic things like social distancing, masking, that's gonna be
Speaker 1: with us for a while. That is going to be
Speaker 1: with us for a while. But hopefully with these vaccines
Speaker 1: coming out, we're going to start to progressively see an impact,
Speaker 1: hopefully and reducing the number of hospitalizations. We might see
Speaker 1: that earlier on, even as it takes time to distribute
Speaker 1: these vaccines and get that into enough people, and during
Speaker 1: that time we all have to work together. This is
Speaker 1: now in the hands of the people of the population,
Speaker 1: each and every one of us. We need to do
Speaker 1: our part in getting vaccinated and and uh keeping to
Speaker 1: the practices, the social discipline and the masking UH to
Speaker 1: to get this under control. Yeah, if I think about
Speaker 1: COVID and this year. I think one word that comes
Speaker 1: to mind over and over again is all about community.
Speaker 1: It's not you know, you've really got to think about
Speaker 1: those around you, your community in terms of getting to
Speaker 1: a post COVID world. Dr Fuller, thank you so much.
Speaker 1: Have a good new year. Dr Deborah Fuller, University of
Speaker 1: Washington School of Medicine, Microbiology professor, joining us now to
Speaker 1: talk about all of this in the future relationship with
Speaker 1: the US and the UK's Karen Piers, she's UK Ambassador
Speaker 1: to the US. Ambassador Peers, thank you so much for
Speaker 1: giving us a bit of your precious time, Ambassador. When
Speaker 1: you look at what comes to with the President Trump
Speaker 1: now out of the White House, does it mean that
Speaker 1: it's less likely for the UK to to get a
Speaker 1: quick deal with the US. Well, I don't want to
Speaker 1: be presumptuous about the Biden administration's policies and priorities, but
Speaker 1: we believe this deal can be done. It can be
Speaker 1: done in twenty twenty one. That said, we don't want
Speaker 1: to set a hard deadline. Much more important to get
Speaker 1: a good deal with with lots of good content. It is.
Speaker 1: It is a good deal. It's a bit spoke deal.
Speaker 1: It wouldn't take too much bandwidth to get it through Congress,
Speaker 1: and we'd be delighted to work with the Biden administration
Speaker 1: if there were particular angles. Some people have mentioned labor,
Speaker 1: some people Paul have mentioned climate that they would like
Speaker 1: to see included. But it is an interesting deal that's
Speaker 1: for the first time. I think we'll have digital commerce
Speaker 1: as as part of its its content, and that's given
Speaker 1: where we are. What would be the UK priorities for
Speaker 1: a US deal, for a deal with the United States
Speaker 1: of America on trade. Well, as I say, we've put
Speaker 1: a lot of effort into what making this deal concentrate
Speaker 1: on digital commerce, that's the way of the future. We've
Speaker 1: also put a lot of effort into small and medium
Speaker 1: sized enterprises. Both our countries depend very much on that
Speaker 1: type of business. But I think that sector is also
Speaker 1: pretty crucial for COVID recovery, and another reason to do
Speaker 1: the deal would in fact be that COVID recovery. We
Speaker 1: want to send an early signal in one of our
Speaker 1: confidence in economic recovery across the globe and particularly in
Speaker 1: the UK and the US. Have you been talking to
Speaker 1: a Biden team already, Um, not directly. The transition team
Speaker 1: have a dictum of one president at a time. They've
Speaker 1: made it very clear they don't want to talk to
Speaker 1: foreign governments, and of course we respect that. And for
Speaker 1: all the Americans who have been nominated for cabinet posts,
Speaker 1: they of course need Senate confirmation and so we would
Speaker 1: not be able to to talk to them, and that's fine.
Speaker 1: That's a standard way that American administrations operate. Instead, We've
Speaker 1: talked to a lot of people around the Biden team,
Speaker 1: and we talk a lot to people on the Hill
Speaker 1: of both parties, and we do find a lot. I
Speaker 1: find as I go on the hill, I get a
Speaker 1: lot of support for a UK US free trade deal.
Speaker 1: And also when I'm talking to governors around the country,
Speaker 1: there's a lot of interest. Thirty three percent of I
Speaker 1: beg your pardon, thirty three out of the fifty states
Speaker 1: have exports to the UK in their top five export markets.
Speaker 1: So there's a lot of interest in a deal with UK,
Speaker 1: that's right. I don't believe the Prime Minister Johnson has
Speaker 1: ever met Joe Biden. Are there any plans for an
Speaker 1: early meeting? Um? I don't think they have met, though
Speaker 1: the Prime Minister has met a number of Democratic UH
Speaker 1: contacts very close to the Biden team. Part of the
Speaker 1: Biden team, and I think that includes from memory, the
Speaker 1: incoming Secretary of State Tony Lincoln if he gets Senate confirmation.
Speaker 1: But the Prime Minister and President Elect Biden did talk
Speaker 1: on the phone very soon after President Elect Biden declared victory.
Speaker 1: I think the Prime Minister was the first European leader
Speaker 1: to speak to the President elect. They had a very
Speaker 1: warm conversation. They talked about a great many things, including
Speaker 1: the free trade deal. They talked about Northern Ireland and
Speaker 1: the importance of upholding the Good Friday Agreement in Northern Ireland,
Speaker 1: and they looked forward to working together on climate in
Speaker 1: particular and on COVID recovery. And the UK will take
Speaker 1: the G seven chair from the Americans in January, and
Speaker 1: COVID recovery is going to be at the heart of
Speaker 1: what we want to do and we think that will
Speaker 1: chime well with President elects Biden's priorities. I don't know
Speaker 1: if you were on that car between the two leaders,
Speaker 1: but what was the chemistry. Like I wasn't on the call.
Speaker 1: This was handled directly between the two offices, but I
Speaker 1: have had a read out. I have talked to the
Speaker 1: Prime Minister. I think the chemistry was was fine. Both
Speaker 1: of them are very affable people. They know the importance
Speaker 1: of personal relationships. They have a lot in common in
Speaker 1: terms of what they want to achieve in twenty one,
Speaker 1: so I think the atmospherics were warm, they were friendly,
Speaker 1: and both of them agreed that there's a lot to do.
Speaker 1: We can do that together. Very important that we work
Speaker 1: closely together on climate. Very welcome that President elect Biden
Speaker 1: has said he wants to bring America back into the
Speaker 1: Paris Agreement, and that's it appears. What what do you
Speaker 1: see as the biggest or or you know, the biggest
Speaker 1: challenge for the UK US special relationship. I think the
Speaker 1: biggest challenge, to be honest, is making sure that we
Speaker 1: see the new challenges coming down the track in one
Speaker 1: and beyond for for what they are. And I think
Speaker 1: particularly of technology in this respect, I think we're now
Speaker 1: standing on the threshold of of a major transformation in technology.
Speaker 1: I personally would liken it to the effect that nuclear
Speaker 1: had in the nineteen fifties, and I think we're really
Speaker 1: going to have to get to grips with that using
Speaker 1: all our innovation and science cooperation charting away to make
Speaker 1: sure that as we develop this new technology, it develops
Speaker 1: onlines that do justice to open societies and open markets.
Speaker 1: We don't want, for example, to wake up one day
Speaker 1: and find that there is Chinese standards on things AI
Speaker 1: and cyber that will be too authoritarian. We want to
Speaker 1: have an open model. And I think the second, the
Speaker 1: second big challenge is the strategic competition from Rasia and China,
Speaker 1: particularly China. We need to get that right again so
Speaker 1: that it's open societies that are seen to thrive and
Speaker 1: recover from the COVID pandemic. And do you think the
Speaker 1: UK and the US will actually work hand in hand
Speaker 1: to tackle some of the challenges that you just laid out, Oh, definitely.
Speaker 1: I mean there's a very deep, profound, successful relationship between
Speaker 1: the UK and US that has endured since the end
Speaker 1: of the Second World War and in fact before that,
Speaker 1: and it doesn't depend on individual leaders on either side.
Speaker 1: And one of the layers of that bedrock, if you like,
Speaker 1: is science. It's innovation alongside the defense and military cooperation.
Speaker 1: But this is not an exclusive enterprise. There will be
Speaker 1: a lot of countries we want to work with the
Speaker 1: great democracies of the world. We want to work with
Speaker 1: them to ensure that open societies recover from the pandemic
Speaker 1: and can go on to tackle some of these really
Speaker 1: big challenges. And that's where maybe just as a final question,
Speaker 1: given we're, you know, towards the end um just just
Speaker 1: twenty days really of the Trump administration, what do you
Speaker 1: think President transgradest achievement has been. UM. I think the
Speaker 1: normalization of relations with Israel from some Arab countries. I
Speaker 1: think that will prove to be a very important step
Speaker 1: forward in the Middle East. It's a bit hard at
Speaker 1: the moment to say exactly how events will unfold, but
Speaker 1: I think it's a very important achievement and we were
Speaker 1: happy to salute it at the time. It provides the
Speaker 1: basis on which to build try and bring peace and
Speaker 1: stability to the Middle East. UM. I think before COVID struck,
Speaker 1: President Trump president get over a thriving economy. That's also
Speaker 1: something to look back on and think about how America
Speaker 1: can restore at that level of economic dynamism after the pandemic.
Speaker 1: And I think what President Trump did on the opioid
Speaker 1: crisis was also very commendable. All Right, Thank you so
Speaker 1: much for your time today, Ambassador Karen Pierce, UK Ambassador
Speaker 1: to the US, joining us to talk about a number
Speaker 1: of things, Brexit and the US and UK relationship forward.
Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and
Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast
Speaker 1: platform you prefer. I'm on Twitter at Tom Keane before
Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg Radio.